SRC-JRN H.B. 1507 75(R)   BILL ANALYSIS


Senate Research Center   H.B. 1507
By: Dutton (Ratliff)
Jurisprudence
5-17-97
Engrossed


DIGEST 

Currently, a large number of attorneys, accountants, and other
professionals are declining services in connection with the issuance of
small securities offerings, due to the risk of jury findings of liability
and the potential for large damage awards.  Many professionals have
indicated that it would substantially increase the probability of
professional involvement in small securities offerings if the amount of
potential liability could be limited to a multiple of the fees earned by
the professional in connection with the transaction.  This bill limits the
liability of professionals under the Texas Securities Act. 

PURPOSE

As proposed, H.B. 1507 limits the liability of professionals under the
Texas Securities Act. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 33, Article 581-33, V.T.C.S., by adding
Subsection N, as follows: 

N.  LIMITATION OF LIABILITY IN SMALL BUSINESS ISSUANCE.  Defines "small
business issuer," for purposes of this section, unless the context
otherwise requires.  Sets forth provisions to which Section 33N applies.
Sets forth a provision relating to the maximum amount of money authorized
to be recovered against a person to which this section applies.  Requires
a small business issuer making an offer of securities to provide to the
prospective buyer a written disclosure of the limitation of liability
created by this section and to receive a signed acknowledgment that the
disclosure was provided. 

SECTION 2. Makes application of this Act prospective.

SECTION 3. Emergency clause.
  Effective date: upon passage.